The hidden cost of illicit trade

April 16, 2018

600 billion illicit cigarettes are sold globally every year, according to the World Health Organization (WHO), which is about 11% of total consumption. Cigarettes are one of the most illegally trafficked goods in the world. The value of the illicit tobacco trade is estimated to be greater than the illicit trade in oil, wildlife, timber, arts and cultural property, and blood diamonds combined.

Why is this such a burgeoning trade? In short, because of high profits at relatively minimal risk. The price of and tax levels on cigarettes vary greatly between countries. And the penalties for smuggling cigarettes in some countries are far lower than for crimes such as smuggling drugs or firearms.

This is bad news for society. It deprives governments of badly needed revenues. If this wasn’t bad enough, the heavy profits fund organized crime and terrorism, among other things.